This paper describes a five-stage approach toward conducting an ecologically based assessment with Indigenous youth populations, and the implications of this approach for the development and implementation of culturally grounded prevention interventions. A description of a pilot study funded by the National Institutes of Health/National Institute on Drug Abuse (NIH/NIDA) focused on drug use and American Indian youth is presented as one model for operationalizing ecologically based assessment with Indigenous youth populations, and issues related to translating the pilot study into a prevention intervention are discussed. This paper suggests that ecologically based assessment can serve as a foundation for culturally grounded prevention interventions, promoting the social and ecological validity of those interventions.